I agree, LV. Why is there always an assumption that the government must get its revenue come Hell or high water? Why is there never serious entertainment of the idea that maybe government should start cutting expenditures? It's a back-and-forth, but that's the problem, the equilibrium has been shifted heavily toward the "revenue" argument for decades. It is time for it to start going back the other way.
The daggers have been out for Amazon and similar companies for a few years now. California's new tax law targeting Amazon via its independent affiliates simply had the effect of Amazon severing its relationship with all California-based affiliates. Many of them ended their businesses or moved to Nevada as a result, meaning those businesses now pay zero to California in taxes. The law of unintended consequences, a law that politicians never seem to comprehend.
On a related note, I read an article yesterday in the Wall Street Journal about stores (namely Target and Best Buy) trying to pressure suppliers into helping them combat the "showrooming" phenomenon. Evidently they're tired of people using their stores as a glorified showroom for items they later buy from Amazon for less. They want manufacturers to start producing model numbers and SKUs unique to their store to make it harder for people to do apples-to-apples comparisons with online retailers. Both this and the taxation efforts strike me as ultimately doomed to failure. This is the evolution of commerce, and the only thing that will be accomplished by these efforts is an artificially stonewalling, and only for a time.
I'm getting way more wordy than I meant to, so ultimately I think both of these things -- the attempted revenue capture and the actions of competitors -- amount to just so much p***ing into the wind. The dynamic of commerce is evolving, as ever. To me the whole "it's not fair that we have to charge sales tax and they don't" argument should just as likely lead to a conclusion of "let's eliminate it for everyone then". It shows just how unbalanced the equilibrium is that no one gives that option serious consideration, no the conclusion must be "what sort of mountains must we move so that government continues to get its precious revenue?" You can see other examples of this when government slaps a high sin tax on things that it ostensibly wants to eliminate, like tobacco and gambling. When those sins decline, they start scrambling and fretting about the loss of tax revenue.
One thing is for sure, artificial barriers to free commerce are doomed to fail over time.
